Mahindra & Mahindra (M&M) has dipped 6% to Rs 1,190 on the BSE in otherwise strong market after the company said Q4FY16 margins could be impacted by around 100 bps, due to expiry of excise duty exemption at its Haridwar plant.

“The excise duty exemption on products manufactured from Haridwar plant expired from 01st January 2016. As a result, the Q4FY16 margins could be impacted by around 100 bps,” M&M said in a conference call hosted by the company’s management to discuss the impact of the Union budget.

The models being produced at the Haridwar plant are 3W and some models of Bolero, Scorpio; and the plant has an annual capacity of 100,000 vehicles, it added.

There might be some impact on volumes on account of infrastructure cess, however it could be offset by factors such as increased rural demand and soft interest rates.

The company said, the increase in allocations for various rural and farmer related activities is positive. Monsoon is a key factor; if that too is positive, the industry growth trajectory could be higher.

At 03:03 PM, the stock was down 5.8% at Rs 1,194 on the BSE as compared to 1.8% rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 2.31 million shares changed hands on the BSE and NSE so far.